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Community Contributor *

Recording PAYE & NI Payments

A simple question, what’s best practice for recording your PAYE & NI payments?

The system caters for VAT very well but it’s a little less obvious for PAYE, Employers NI & Employees NI.

 

Solved
Best answer 07-24-2018

Accepted Solutions
QuickBooks Team

Re: Recording PAYE & NI Payments

Hi James55,

 

With Quickbooks Online, the system will record your Liabilities for these payments to either Payroll Liabilities: HMRC or an account called "Tax and National Insurance".

 

When you're paying HMRC you would create an expense, and in the account line put the appropriate account which shows a balance on your Chart of Accounts or Balance Sheet.

 

Hope this helps :)

Thanks,

18 REPLIES 18
QuickBooks Team

Re: Recording PAYE & NI Payments

Hi James55.

 

Thanks for getting in touch with the Community.

 

This is certainly something I can help with :)

 

Can I just confirm if you are running your Payroll through the QuickBooks payroll services or are you running your payroll outside of QuickBooks and just wanting to record the payments through the software?

 

Let me know and I will be back in touch with more information :)

Community Contributor *

Re: Recording PAYE & NI Payments

Hi,

This is running payroll through quickbooks online system. 

Thanks,

james

QuickBooks Team

Re: Recording PAYE & NI Payments

Hi James55,

 

With Quickbooks Online, the system will record your Liabilities for these payments to either Payroll Liabilities: HMRC or an account called "Tax and National Insurance".

 

When you're paying HMRC you would create an expense, and in the account line put the appropriate account which shows a balance on your Chart of Accounts or Balance Sheet.

 

Hope this helps :)

Thanks,

Community Contributor *

Re: Recording PAYE & NI Payments

Thanks for your help, That’s done, was I right to list HMRC as a supplier? Obviously this wasn’t required for VAT submissions as that part is quite automated.

After we ran our first payroll on our system, we realised we didn’t have ‘Employment Allowance’ turned On in settings. HMRC have automatically given us the allowance so I have a liability on the system we do not need to pay. How should we cancel that liability?

QuickBooks Team

Re: Recording PAYE & NI Payments

Hi James55,

 

You would be right in creating the Supplier for the HMRC, You can always remove the Journal if you do not require the Liability to be there. I would always advise checking with your accountant before deleting the Journal as if it is removed there is no way to recover this without creating it from scratch.

Community Contributor *

Re: Recording PAYE & NI Payments

Thanks everyone for your advice. Nearly there.

When you switch on ‘Employment allowance’ you have the opportunity to tell the system how much of the allowance has been previously allocated which we’ve set at the amount from the payroll run prior to it being turned on. Is deleting the journal for the amount still showing as a liability which now doesn’t need to be paid the right or the only thing to do?

Do I have any other options to zero the liability?

QuickBooks Team

Re: Recording PAYE & NI Payments

Hey James55,

 

If you have Employment Allowance from HMRC but have not ticked this option in QuickBooks Online, then I would suggest rolling back the payroll to allow you to tick this option and run the payroll again.

 

Doing this will correct the liability owed as QBO will know to apply the EA and reduce the liability accordingly, thus matching HMRC's figures.

Community Contributor *

Re: Recording PAYE & NI Payments

Thanks, Can your suggest the right method for rolling back payroll on the Quickbooks online payroll system?

QuickBooks Team

Re: Recording PAYE & NI Payments

Hi James55.

 

Absolutely, if you wanted to rollback a period in the QuickBooks Online Payroll system, you would do this by clicking on the Employees tab and selecting the period you wanted to rollback from the pay history. If you then click on this you will see a small Bin icon in the top right hand corner that will allow you to delete that pay period and roll you back to the previous.

 

I will however mention that if you rollback a period on QuickBooks Online payroll, all of the data for that period will be erased and you would have to enter it again for that period and any subsequent periods on the payroll.

 

Please let me know if there is anything else I can help with and I will be back in touch :)

Community Contributor *

Re: Recording PAYE & NI Payments

Thanks, I’ve deleted the two payrolls ready to re enter but the HMRC liabilities are still showing in the Payroll Liabilities Account, should I delete these manually before re running payroll?

QuickBooks Team

Re: Recording PAYE & NI Payments

Hi James55,

 

Thank you for getting back in touch. 

 

Yes,  I would recommend to delete the journal entries if you have deleted the payrolls. To do this open the journal entry click More and the bottom and then Delete.

 

Please let me know if there is anything else I can help. :)  

Experienced Member

Re: Recording PAYE & NI Payments

HI, please can you tell me how you would record it if you are running payroll outside of quickbooks ?

QuickBooks Team

Re: Recording PAYE & NI Payments

Hi Helen142,

 

I'd recommend speaking to your accountant, as s/he may have a specific way to do it.

 

My advice is to create an expense account called "PAYE & NI" and an expense account for "Pension", you could also have one for "Employee Wages"

 

You could also set up each of your Employees on QuickBooks without "Choosing a plan" so you can reference when you're paying them and how much down to an individual level.

 

You could get into a further detail by journalling in a balance from the expense account to a Liability account when you become liable for the payment from HMRC, and then paying off the liability account instead of posting direct to the expense account - This is where the accountants authority and advice comes in as they can tell you which is necessary for your business's books.

 

Thanks,

Experienced Member

Re: Recording PAYE & NI Payments

Thank you, I already have accounts set up for ‘Employees Pension’ and ‘Wages & Salaries control’ and there is an account already set up by quickbooks for ‘Employers NI contributions’

 

All bank transactions for Pension payments get added to ‘Employees Pension’

 

All bank transactions for salary payments get added to ‘Wages & Salaries control’

 

Should all bank transactions for PAYE & NI be added to ‘Employers NI contributions’ ?

 

Also I had added a journal entry a while ago with payment details taken from our payroll software – I think I may need to amend / delete this but I have no idea where to find it again? I can see in the account history for ‘Wages & Salaries control’ that the journal is listed there and has populated items for Sept but I cant seem to access the journal?

 

Sorry does any of this actual make sense?

QuickBooks Team

Re: Recording PAYE & NI Payments

It does make sense;

 

Regarding the accounts to post them too, it's entirely upto you and the accountant, i probably wouldn't user the Employers NI Contributions, that's specifically for your contributions only - you may want to set up a one just called "National Insurance" if you want to split them, my advice would be to create a new Expense Account called PAYE & NI and add the transactions to HMRC to that.

 

As long as Employees Pension is set up as an Expense Account, as is Wages & Salaries Control. If they are not set up as expense accounts, create your own and use your own.

 

If you can see it in the account history, you should be able to click on the transaction line to turn it blue, then click on edit. Or alternatively, click on the words "Journal Entry" - It should take you too it.

 

You can create an account by clicking on Accounting and then Chart of Accounts and then New in the top right hand corner of the page.

 

Thanks,

Active Member

Re: Recording PAYE & NI Payments

Hi Ash,

 

Do you have any advice for using external payroll in this situation?

 

Best,

Aaron.

QuickBooks Team

Re: Recording PAYE & NI Payments

Hello Aaron!

 

Your question is the same as Helen142's. You can refer to her conversation with JamesC starting on 09-27-2018 04:26 AM.

 

You can drop by here if you need anything else.

Experienced Member

Re: Recording PAYE & NI Payments

Hi

 

Can you confirm best account and detail type options to record one-off and regular pension payments.

 

Thanks